Note 9 - Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 9 – FAIR VALUE MEASUREMENTS

The Company uses a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable.

Level 3 – Unobservable inputs that reflect the Company’s own assumptions.

During 2021 and 2020, there were no transfers into or out of Level 2 or Level 3.

Recurring Fair Value Measurements

Certain of the Company’s assets are reported at fair value in the accompanying consolidated balance sheets on a recurring basis. The Company determined the fair value of equity securities and available-for-sale debt securities using quoted market prices, and where applicable, securities with similar maturity dates and interest rates.

At December 31, 2021 and 2020, the Company’s assets reported at fair value on a recurring basis are summarized as follows:

	2021
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities –
Domestic Equities	$	6,822,808	$	---	$	---
International Equities		1,856,904		---		---
Others		462,645		---		---
	$	9,142,357	$	---	$	---

	2020
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities –
U.S. Treasury Bills Maturing in 2021	$	---	$	1,515,234	$	---
Equity Securities –
Domestic Equities		1,506,514		---		---
International Equities		630,494		---		---
Others		399,474		---		---
	$	2,536,482	$	1,515,234	$	---

Non-recurring Fair Value Measurements

The Company’s asset retirement obligation incurred annually represents non-recurring fair value liabilities. The fair value of the non-financial liabilities incurred was $400,801 in 2021 and $0 in 2020 and was calculated using Level 3 inputs. See Note 2 for more information about this liability and the inputs used for calculating fair value.

The fair value of oil and gas properties used in estimating impairment losses of $1,673,929 for 2021 and $2,517,873 for 2020 were based on Level 3 inputs. See Note 10 for the procedure used for calculating these expenses.

Fair Value of Financial Instruments

The Company’s other financial instruments consist primarily of cash and cash equivalents, trade and notes receivables, trade payables and dividends payable. As of December 31, 2021 and 2020, the historical cost of cash and cash equivalents, trade and notes receivables, trade payables and dividends payable are considered representative of their respective fair values due to the short-term maturities of these items.